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P2P News – All The Latest Updates

Hi guys and welcome to another P2P news round-up, as usual we will be giving you a snapshot of the latest goings-on in the P2P world. Today we look at an array of news items from there is no evidence of P2P investors underestimating risk to focusing on what the P2P and marketplace lending industry needs to do to go mainstream. Missed our last P2P news round-up? If so, catch up here.

No evidence of P2P Investors Underestimating Risk

Last month, former FCA chief executive, Tracey McDermott, voiced concerns about the rapid growth of the P2P marketplace that could potentially leave some investors unaware of the risks.

However, the P2PFA’s (Peer-to-Peer Finance Association) director Robert Pettigrew, stressed that this was not the case.

Mr. Pettigrew recently mentioned that although approaches varied depending on the company, the P2PFA was dedicated to ensure investors were aware of all the risks involved.

In addition, he stated : “Different platforms have adopted a variety of approaches to ensure a high level of consumer understanding, but with continued grow and expansion in the sector, the focus on making sure that all investors have an awareness and understanding of the risks of peer-to-peer finance products will continue to be a major priority for P2PFA platforms.” (Bridging & Commercial, September 2016)

Platforms such as LendingCrowd and LandBay recommend that investors should require financial advice if they are unsure about the investing process.

Stock Market VS Peer-to-Peer Lending Investments – Who Wins?

To buy stock, or not to buy stock that is the question! With recent markets in a volatile state you might want to look for an alternative.

Anyone who is an active stock market investor knows that it takes time to do your research (and a bit of guess work) to figure out where the market(s) are heading.

However, if you’re looking for something that’s less time consuming and slightly more effective – P2P might be for you. There are many platforms out there that are free to pick through the loans that are listed by prospective borrowers and read their stories and explanations of why they need a loan for and what they’ll do with it.

You should review the prospectus of your chosen P2P lending platform before investing as well as spreading the risk of your investment.

With any investment there is always risk involved, however, many view P2P is an alternative, especially with the current volatility of the markets. Anyone looking to diversify their investment and move away from traditional investment options might want to go down the P2P route.

Interested in P2P? If so, why not take a look at our P2P page where you can view investments and order a free information pack.

Brexit Vote Scares Investors Away From Traditional Asset Classes

New research suggests that the UK’s Brexit vote is putting investors off traditional asset classes.

Research revealed that 13 per cent of active investors said they have steered clear of currency markets since the EU vote back in late June, in addition, 10 per cent have avoided government bonds and nine per cent have u-turned from investing in equities.

Leicestershire based P2P lender ThinCats told City A.M. that 30 per cent of investors – from a survey of 2,000, including 500 defined as active investors have been put off traditional asset classes.

However, the research showed that assets such as gold has become more attractive, 14 per cent of investors stated that they have turned to the commodity as an alternative. Moreover, 7 per cent, said they view P2P as more attractive after the Brexit vote.

What P2P and Marketplace lending Industry Needs To Do To Go Mainstream

A lack of transparency is one of the key obstacles for p2p and marketplace lending platforms experiencing considerable growth in scale, according to ThinCats’ John Mould, who believes there are several other hurdles the industry needs to overcome to fit into the mainstream investment universe. (Altfi, September 2016)

It’s fair to say that 2016 has been a challenging year for the industry which has seen high profile scandals as well as seeing slow growth.

ThinCats’ CEO told Altfi that he believes the broader industry should deal with several issues centring on greater transparency in returns, what investors are exposed to and securitisation. Mr. Mould says that many platforms are really asset management firms in disguise and should therefore be regulated as such.

Areas where Mould stresses investors and borrowers need greater transparency is in provision funds, collective pools of cash liquidity that act as a type of insurance for investors.

In the Altfi article he also questions the lack of clarity that is linked to retail and institutional investors. He stresses that the issue is that we are not quite sure how they are both treated fairly. We know in a fund that they all come at the same unit price, he mentions, but he questions on who makes the decision process on the loans?

He again questions the lack of clarity in the last paragraph of the article : “If you’re the regulator you’re saying half of them look like fund managers, half of them look like banks but worse and half of them have these provision funds that we don’t know how they work and half of them just seem to be securitising debt. How does that work?”.

What Are Your Thoughts?

Which of our chosen P2P stories has interested you the most? We would love to hear from you, feel free to leave us a comment on our Facebook and Google Plus pages. If you prefer to tweet us, tweet @TheHouseCrowd.

In the meantime if you want to know more about Property Crowdfunding do register for our Information Pack which will tell you all about it.